After just under two years in Canada, American retail giant, Target, is officially giving up on its attempt to expand north of the border. The announcement was made Thursday morning, with CEO Brian Cornell saying, “simply put, we are losing money every day.” He said they were unable to justify keeping even a percentage of stores open, and decided that it is in the best interest of shareholders and the corporation to leave Canada, and continue to focus on business in the U.S instead.
Consumers were initially excited to hear Target would coming to Canada, eager to get in on the great deals they were used to seeing in the American stores. But when the stores opened, excitement turned into disappointment, and then people pretty much forgot Target existed. Basically, the stores weren’t what they expected, and attempts to address problems never quite made the difference that was required.
The last year was all about improving day to day operations, and building a relationship with customers, but lacklustre sales during the Christmas season was the final nail in the coffin. The company is currently losing an estimated $3.1 million a day just by staying open, with no end in sight. Even with improvements, Target Canada wasn’t projected to start making a profit until 2021.
Problems have included inventory issues (remember all those empty shelves?), higher than expected prices, and the mistake of taking on too much. Cornell acknowledges that they made a mistake by opening 100 stores all at once, instead of easing into it. Now, 17,600 employees are going to be out of a job in the next couple months as operations wind down, and stores shut their doors.
The company says workers will receive a minimum of 16 weeks compensation, including wages and benefits while the stores enter the liquidation process. For a company that has lost an estimated $2.1 billion in the 22 months it has been in Canada, employees are lucky the company is committed to making their exit as smooth as possible.
Target took over old Zellers locations in 2012, and there are currently 133 stores across Canada scheduled to shut down in the next couple months. No word yet on what brave retailer will take over the seemingly cursed locations once Target is gone.
